Canada's cities say a Liberal proposal to scrap a $1-billion infrastructure fund will rob them of one of their few remaining sources of federal cash.

Weighing in on the election campaign, the Federation of Canadian Municipalities says the Liberal plan would give cities money with one hand while taking with the other.

"It's a bit of a shell game," Calgary Mayor Naheed Nenshi said in an interview with The Globe and Mail. "I was surprised to see it in their platform. Their platform certainly says some good things about affordable housing, but it says basically nothing about infrastructure or transit or any of the other issues that are important to cities, which I found a bit surprising."

The Liberal plan, released Sunday, promises a $275-million-a-year "Affordable Housing Framework," aiming to reduce homelessness, and build and maintain social housing. To pay for this, a Liberal government would end the $1-billion Public Private Partnership Infrastructure Fund on the grounds that it has "accomplished virtually nothing."

While that may be true - it has only funded a handful of projects since it was launched in 2008 - many municipalities have submitted or are planning to submit projects in the hope that the Crown corporation will share construction costs with cities and the private sector.

Calgary has asked the P3 fund to help pay for four urban recreation centres, which the mayor said are sorely needed in Calgary.

While the recent two-year flurry of stimulus spending by federal and provincial governments was welcome, Mr. Nenshi said it barely made a dent in the infrastructure deficit that cities continue to face. Yet now that the stimulus spending is over, the P3 fund is essentially the only place left for cities to turn to when they are looking for infrastructure help.

The Liberals said Monday they want to scrap the fund because it wasn't effective.

"We are not putting one dime less into Canada's cities than the Conservatives, whose track record points to a scattershot and often partisan approach to infrastructure funding," Liberal Leader Michael Ignatieff's director of communications said. "We're just taking an approach that works better than the failed (P3 fund), which has only put 8 per cent of funds out the door."

Instead, Leslie Church said, the Liberals are "diverting that funding toward affordable housing," arguing it has been a priority for cities for years now.

"As Building Canada winds down in 2014, we'll be working with provinces and municipalities on a new, long-term infrastructure plan that focuses on public transit and commuter rail, as well as highways, major roads, and municipal projects," she said.

The federal P3 fund may be low profile, but the projects cities have in mind are certainly not.

In addition to the Calgary recreation centres, the fund is also being eyed as part of Toronto's subway-expansion plans.

The Toronto Transit Commission recently indicated that it would be asking the fund for $333-million toward a 25-kilometre underground line.

Saskatoon is expected to ask the fund for public-transit cash, while the city of Regina and the province of Saskatchewan submitted a bid to have the fund as a partner in a new CFL stadium.

Mr. Nenshi said he hopes all parties will make urban issues like public transit a key part of the federal campaign.

Liberal infrastructure critic John McCallum said his party - should it form government - is committed to sitting down with municipalities to sort out what future infrastructure programs are needed.

"The P3 fund has been there for close to three years and only 8 per cent has been used," he said. "On the other hand, whenever I talk to mayors, they always emphasize the high priority they attach to affordable housing."

Mr. McCallum said discussions with municipalities would determine what the government's full infrastructure plan would look like.

"We completely agree with a major federal role for infrastructure," he said.

Liberal Party support is generally concentrated in urban ridings, whereas Canada's rural ridings are more likely to support the Conservatives or NDP. In the Liberal platform, the party is attempting to please both rural and city dwellers with an $80-million "buy local" fund to increase the availability of local produce and other measures aimed at rural Canada, such as expanded broadband Internet access. The Conservative Party's campaign is largely focused on expanding on its rural base by winning more suburban ridings.

NDP Leader Jack Layton has yet to release his party platform. He is a former president of the Federation of Canadian Municipalities and a former Toronto city councillor who regularly advocates for more spending on urban issues.

Hans Cunningham, the current FCM president, said ending the P3 fund won't help cities deal with pressing issues like traffic gridlock.

"We can't go back to robbing Peter to pay Paul in our communities," he said in a statement to The Globe. "Any change to any program - P3 or otherwise - must come with a guarantee that protects every dollar intended for local roads, public transit and other municipal infrastructure."

The P3 fund was created in the 2008 Conservative budget as a Crown corporation with $1.25-billion to spend. So far, it has contributed $25-million toward a road extension in Winnipeg, $50-million project in the Maritimes to expand emergency radio services and $25-million to a commuter-train maintenance centre in Montreal.

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